These aren’t the Social Security updates you were expecting, we know, but with the arrival of the Trump Administration, changes didn’t take long to appear.
Through the Department of Government Efficiency (DOGE), a proposal has been made that’s going to upset thousands of retirees in our country. Starting March 27, those who received more money than they were owed will have their payments withheld until their “debt” is paid off. Yes, until 100% of the overpaid amount is recovered, your Social Security payment will be frozen. Why is this happening?
What’s going on?
As harsh as it sounds, for years and decades, the Social Security Administration has been making overpayments to many beneficiaries (often without them even realizing it). We’re talking about a system that pays around 70 million people every year, so it’s expected that some mistakes happen, mistakes, by the way, that many recipients weren’t even aware of, which makes this even more shocking.
Why do these errors happen?
It’s not fraud or anything like that, but overpayments happen due to oversights, changes, or other issues, like working more hours than reported, for example. The system keeps calculating as if nothing has changed when in reality it has. That’s when problems start. It can also happen due to errors by Social Security itself, and of course, they are primarily responsible for this strange situation many beneficiaries are about to experience. Let’s not forget that Social Security operates automatically and handles millions of dollars every month.
How long has this been going on?
It’s estimated that from 2015 to 2022, these “improper” payments amounted to more than $72 billion. Although that represents less than 1% of the total, it’s impossible to ignore.
How will they proceed?
Until now, the Biden Administration deducted 10% from affected beneficiaries’ monthly payments. But the new administration is being much stricter and wants to use these months to recover that money. So many beneficiaries will see 100% of their monthly payments disappear. Tough times are ahead, so it’s time to tighten your belt.
What if I have to pay money back?
First, don’t panic. Make sure you have enough money to get by in the coming months. Check the numbers when you receive the notification of the amount owed. If something doesn’t add up, don’t hesitate to consult a financial or accounting expert for help. If there’s a mistake, you’ll of course have the right to appeal.
In other cases, if you did receive more money than you were supposed to, you’ll have to face it, even if it wasn’t your fault, and live through a complicated few months. That’s why we suggest tightening your belt and reassessing your expenses.
Are there any exemptions?
Yes, but likely not for everyone. Only people who can prove they don’t have the means to pay may be exempt (though it’s unclear if fully). Of course, you’ll need to fill out paperwork and justify your situation.
Why are they claiming this money now?
DOGE is working hard to reduce the cost of social services, and they believe the system needs to be fair and sustainable. That’s why they’re rushing to recover the money. Allowing these mistakes to continue over time would only jeopardize the balance of the system (which is already on shaky ground…) Even though it’s very unfair for people who rely 100% on Social Security. Let’s hope that all those affected have some kind of survival kit to get through the month without too much hardship, since most of these beneficiaries are vulnerable individuals.
How to avoid this happening to you
The key is constant communication with the SSA. Did you change jobs?
Notify the SSA. Did you get married or divorced? Notify them. Lost your income source? Notify them. You must always inform them immediately to prevent these situations. As our grandmothers used to say, better safe than sorry.
